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Cloud to add $181b to UAE economy by 2033

UAE cloud adoption is three times higher than the Mena average

The UAE has the potential to unlock $181 billion in additional economic value over the next decade (2023-2033), or 2.5 per cent of the country’s cumulative gross domestic product by accelerating the adoption of cloud services, according to a study commissioned by Amazon Web Services.

In the Middle East and North Africa (Mena) region, the UAE stands out as the country where cloud adoption drives the most significant economic growth through spillover effects. A one per cent increase in cloud adoption by UAE organisations leads to average GDP growth of 0.21 per cent, equivalent to $854.7 million, according to the study.

This growth rate is three times higher than the Mena average, making it the highest in the region. Remarkably, over 91 per cent of this impact can be attributed to the national productivity gains or spillover effects on the economy, while the remaining nine per cent is driven by cloud spending from both public and private organisations in the UAE.

“As an economic catalyst, cloud computing proves to be 17 per cent more effective in stimulating the UAE’s economy compared to mobile broadband,” said the report.

The UAE has ambitious plans to diversify its economy through digitisation. In 2021, 43 per cent of organisations in the UAE region adopted cloud computing, versus 49 per cent in Western Europe and North America. With the government’s focus on digital transformation, it is well-positioned to become a hub for cloud computing in the region.

“The widespread adoption of cloud has already led to increased efficiency, cost savings, and job creation in various industries. As more businesses and organisations continue to migrate to the cloud, the economic benefits are expected to grow even further,” said Yasser Hassan, managing director of the commercial sector in the region at AWS.

He said the findings underscore a remarkable opportunity for the UAE to expedite its economic growth and establish itself as an appealing and influential economic centre, which aligns with the government’s “We the UAE 2031” vision.

“As cloud computing continues to gain momentum, it is imperative for the UAE to continue to support cloud adoption and develop a skilled workforce to enhance the country’s competitiveness on a global scale. With the support of AWS, the UAE can accelerate its digital transformation and unlock new opportunities for economic growth and social development,” he added.

The study revealed that the UAE experienced a significant boost in its economy in 2021, thanks to the widespread adoption of public cloud services. This adoption contributed 2.26 per cent to the country’s GDP, resulting in an economic value of $9.5 billion. “Notably, this contribution represents the largest impact of public cloud adoption on GDP in the region. The positive influence on the economy is not limited to productivity alone but also encompasses the construction aspect of establishing and operating cloud infrastructures within the UAE,” said the report.

The study, performed by Telecom Advisory Services, identifies four key advantages of cloud computing: First, it enhances business efficiency and effectiveness, streamlining processes and improving outcomes; second, it offers access to a wide range of services, enabling businesses to leverage advanced technologies; third, it boosts productivity by facilitating collaboration, mobility, and agility within the workforce; and fourth, cloud computing promotes environmental sustainability by reducing carbon emissions per unit of data transmitted.